Climate Finance 101 – What is GEF

What is GEF?

The Global Environment Facility (GEF) was established on the eve of the 1992 Rio Earth Summit

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GEF was established in the International Bank for Reconstruction and Development (IBRD or World Bank) as a pilot program in order to assist in the protection of the global environment and promote environmentally sound and sustainable economic development

The GEF shall operate as a “financial mechanism” for the purpose of providing new and additional grant and concessional funding (loans) to achieve agreed global environmental benefits in the following focal areas:

  • (a) biological diversity
  • (b) climate change
  • (c) international waters
  • (d) land degradation, primarily desertification and deforestation
  • (e) chemicals and wastes

Do you have the same thoughts as me ?

The GEF serves as “financial mechanism” to five conventions, which are Convention on Biological Diversity (CBD), United Nations Framework Convention on Climate Change (UNFCCC), Stockholm Convention on Persistent Organic Pollutants (POPs), UN Convention to Combat Desertification (UNCCD), and Minamata Convention on Mercury.

GEF is subject to review every one replenish cycle, which is four years. We are currently in the end of GEF-6 (the 6 Replenishment).

Who are the donor?

GEF funding is contributed by the Contributing Participants (the donor countries). These financial contributions are replenished every four years by a total of 39 donor countries, which consist of both developed and developing countries. As you might be expecting, India and China are part of the donors.

Extracted from GEF website

At the last replenishment (the 6th replenishment), 30 countries pledged a record US$4.43 billion for the GEF-6 period that runs from 2014 to 2018

Who can get the funds?

GEF funds are available to developing countries (including those donor from developing countries) and countries with economies in transition to meet the objectives of the international environmental conventions and agreements.

For an instant, India is both a donor and recipient of GEF resources. India has contributed USD 63 million to GEF Trust Fund (1991 – June 2018)

via GIPHY

GEF support is provided to government agencies, civil society organizations, private sector companies, research institutions to implement projects and programs in recipient countries.

Who administer the fund?

The World Bank Working for a World Free of Poverty

The World Bank serves as the GEF Trustee, administering the fund. The Trustee roles:

  • helps mobilize GEF resources
  • disburses funds to GEF Agencies
  • prepares financial reports on investments and use of resources
  • monitors application of budgetary and project funds.

Who are GEF Agencies?

GEF Agencies help eligible governments and NGOs to develop, implement and execute their projects. Through partnership, it reinforces the individual Agency’s efforts to mainstream or incorporate global environment concerns into its internal policies, programs and projects.

There are a total of 18 agencies now. To name a few

What happen after GEF-6?

The GEF Trust Fund is replenished every four years by donor countries through a year-long replenishment process

A new financing commitments for the period from July 1, 2018 to June 30, 2022 (the 7th Replenishment or GEF-7) shall become effective on the date when Contributing Participants (the donor) whose contributions aggregate not less than 60% of the total contributions of all Contributing Participants.

If the GEF-7 does not become effective by March 31, 2019, the Trustee shall so inform the Contributing Participants and consult with them on possible steps to be taken to prevent any interruption of GEF financing.

Role of CSO in GEF – capacity building

Effective participation of civil society is a key in achieving the GEF’s mission and objectives of the programs and projects.

To support the work of communities and CSOs and the GEF has created the GEF Small Grants Programme (GEF SGP), implemented by UNDP, that provides financial and technical support to meet the overall objective of “global environmental benefits secured through community-based initiatives and actions”.

UNFCCC and GEF – The connection

Under the Convention and the Kyoto Protocol, developed country Parties (Annex II Parties) need to provide financial resources to assist developing country Parties in order to meet the objective of the convention.

To facilitate this, the Convention appointed the GEF as the financial mechanism and provide guidance. The GEF will also serve the Paris Agreement as part of the decision in COP21, Paris. The mechanism will also be subjected to review every four years.

The financial mechanism is accountable to the COP, which decides on its climate change policies, program priorities, and eligibility criteria for funding, based on advice from the Subsidiary Body For Implementation

There are a few funds established under UNFCCC which is managed by GEF:

  • Special Climate Change Fund (SCCF)
  • Least Developed Countries Fund (LDCF)
  • Capacity Building Initiative for Transparency (CBIT) – new
  • Adaptation Fund

How about Malaysia

Is Malaysia eligible?

Yes. Malaysia is eligible for GEF funding as he has (1) ratified the conventions the GEF serves i.e Convention on Biological Diversity (CBD) and United Nations Framework Convention on Climate Change (UNFCCC)

Besides, Malaysia is also eligible to (2) borrow from the World Bank (IBRD) and (3) a recipient of UNDP technical assistance through country programming.

Malaysia at a glance

Number of project: 58

Grant received:

Trust Fund Project Type Number of Projects Total Financing Total Co-Financing
GEF National 28 $87,419,664 $367,040,057
Regional/Global 30 $247,950,366 $1,865,001,311
Total 58 $335,370,030 $2,232,041,368

 

STAR* GEF-6 Allocation and Utilization (All amounts in US$) 2014 – 2018

Focal Area Indicative allocation Allocation utilized Allocations remaining to be programmed
Land Degradation $1,308,301 $293,750 $1,014,551
Climate Change $11,042,779 $7,262,500 $3,780,279
Biodiversity $14,922,523 $4,633,275 $10,289,248
Total $27,273,603 $12,189,525 $15,084,078

 

*System for Transparent Allocation of Resources (STAR) determines the amount of GEF resources that a given country can access in a replenishment period. It replaces the Resource Allocation Framework (RAF) that was used during the fourth replenishment period of the GEF (GEF-4).

 

Written by Thomas Lai

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